AT&T's Cable Business Continues to Be Savaged by Cordcutting

Photo: AP
Photo: AP

It’s not exactly a secret that the cable business is in decline, with millions of TV subscribers choosing to go with what are usually superior and almost always cheaper digital-only options.


The pace of cordcutting has continued undiminished. Cable giant AT&T took huge losses among subscribers in third quarter 2017, with its DirecTV and U-Verse networks losing a record 385,000 subscribers, Variety reported. The losses were mitigated in part by 296,000 signups to its digital DirecTV Now service, but AT&T’s traditional TV subscriptions are still down 969,000 in the first nine months of 2017.

Customers aren’t refusing to shell out for TV entirely, but they are shifting into digital delivery in droves. According to Variety, AT&T CFO John Stephens told investors in a Tuesday call that the 296,000 additions to DirecTV Now were roughly half comprised of customers from “traditional pay-TV rivals,” while ten percent were transitioning AT&T cable subscribers and the remainder “cord-nevers” new to the paid TV market. But DirecTV is a lower-priced option than a full cable hookup, meaning it’s probably not making up for the losses.

As the Houston Chronicle noted, this is one reason AT&T is very eager to wrap up its $80 billion plus deal to acquire entertainment conglomerate Time Warner: Its core businesses “have stalled or are in decline,” and adding a major media business would allow it to compete more effectively with services like Netflix with in-house production studios. In short, it’s trying to come up with a Plan B.

That merger is still awaiting final approval from the Department of Justice, largely due to concerns it could centralize too much power in the resulting conglomerate, and that AT&T could use its dominance of wireless and satellite networks to discriminate against competitors’ content—say, by excluding them from packages or throttling streaming speeds. That’s an especially big concern, given mobile service providers including AT&T’s half-hearted attempts to keep up with the surge in streaming.




All this talk about AT&T being “too powerful” yet Comcast owns NBC/Universal/Everything... and uses strong arm tactics to effectively red tape/charge competition out of existence; all while charging insane prices to its customers after short “promotional periods”. Don’t get me started on the data caps... :(